Thursday, January 6, 2011
By: Michael Pento
Guess what? Shocker of all shockers, the Labor Department underestimated the number of initial jobless claims last week! They originally said that 388k individuals filed for first time jobless benefits. In the week ending January 1st, the Labor Department had to revise higher its count by 3k. But still, the number of initial claims jumped by 18k--which was in reality was a jump of 21k from what they originally reported—and placed the total number of claims at 409k. Interestingly enough, the number of unadjusted claims actually increased by 52k!
The fact is that the labor department underestimates the number of claims as a matter of practice. If they can’t accurately count the number of people that actually file benefit claims how can they possibly accurately factor the seasonal adjustments to the number?
California showed the biggest jump in applications, a 15,972 increase, and cited increased firings at transportation, construction and manufacturing firms. The type of jobs being added are those in the retail space like Dollar General Corp., the biggest of the U.S. dollar discount stores, The Company plans to add 6,000 jobs and is opening 625 stores this year. Yippee!
However, the companies that are cutting staff are those in the goods producing sector of the economy like AK Steel Holding Corp, the third-largest U.S. steelmaker. The company said it is closing a Kentucky coke plant to reduce costs. The shutdown of the Ashland facility, which has 263 employees, will be completed early in the second quarter.
Strip malls that contain at least one bank have become America’s economic paradigm. At least that gives us a reason to tear down those decrepit and abandoned factories. Vigilant Grandpa's take on DOL Seasonal Adjustments
Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.